The new club law

The Associations Act 2002 came into force on 1 July 2002. However, the provisions on accounting and accounting limits first apply to financial years beginning after 31 December 2002. The following explanations are limited to accounting, the audit, and the liability of the bodies and auditors.

Accounting

:: The Managing body (at least 2 people) shall be responsible for the current recording of income and expenditure, and within 5 months of the end of the twelve-month financial year, for the preparation of an income/expenditure statement and balance sheet, with different accounting regulations applying according to club size. Medium-sized clubs (from €1 million income and expenditure) are already obliged.
:: The Auditor (at least 2 people) shall conduct the financial audit within 4 months and prepare an audit report on the regularity of the accounting and the statutory use of financial resources. If financial obligations exist that far exceed the association's assets, they shall indicate the association's existential threat in the audit report.
:: The Members' meeting is to be informed about the audit. If this is not done in proper form by the executive body, the auditors are obliged to convene the members' meeting and draw attention to any budgetary deficiencies or threats to the company's existence.

Accounting for large clubs

:: An association is considered large if, in two consecutive years, its ordinary income or expenditure exceeds €3 million, or its donation income exceeds €1 million. As accounting regulations come into effect for financial years beginning after 31 December 2002, the accounting thresholds for the financial years 2003 and 2004 are decisive. If the aforementioned limits are exceeded in these two years, the accounting rules will apply for the first time in 2005. The question of whether (umbrella) associations are to be classified as large associations when exceeding the stated thresholds in the course of channelling subsidies to their subordinate associations remains to be clarified. However, this is to be assumed according to the ratio legis.
:: The „extended“annual accounts comprises the balance sheet and the profit and loss account, including the annex. This annex must state: Membership fees, public subsidies, donations, and income from economic activities.
:: The Final exam must be carried out by an auditor who takes on the task of the statutory auditors. If the association is audited by public grant providers, this area is not to be audited again by the auditor. The result of the grant audit must be communicated to the auditor.

Terms of liability

For the management bodies and auditors, there is liability for fault for:
:: Misappropriation of club assets
:: Investments without adequate financial security
:: Non-compliance with accounting regulations.
For auditors, there is a liability limit of €2 million.
The right to bring claims for damages is reserved for the general meeting or, in the event of the general meeting failing to act, for the members (10 %). A special representative may also be appointed.

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